'FDI to help growth in retail sector'

Allaying fears that foreign direct investment (FDI) will bring job cuts in the Indian retail sector, consumer affairs department secretary L Mansingh on Friday said FDI was "necessary for the growth of the organised retailing sector in India".

"If FDI is allowed gradually, this is unlikely to happen," he said, referring to fears that the entry of organised retailers such as Wal-Mart would render jobless those employed in the Indian retail sector, dominated by small and medium shops.

Speaking at a symposium on Indian Retail Bandwagon "" Are You On, organised jointly by the CII and the Indian Institute of Foreign Trade (IIFT), Mansingh said FDI would help the Indian retail sector overcome a lack of experience in organised retailing as well as the lack of trained manpower.

"It would introduce fiscal discipline into retailing. FDI would also supply capital required to set up organised retail stores," he added, along with associated supply chains, worth several hundred crore rupees," he added.

He, however, said constraints such as antiquated laws like the essential commodities act and the weights and measures act needed to be overhauled to boost growth in the sector.

He said organised retailing would reduce the cost of intermediation "" that was the price paid to the producer and the cost to the consumer "" as India is amongst the countries which have the highest cost of intermediation.

Mcdonalds India Managing Director Vikram Bakshi said, "In India, organised retailing is growing at 40 per cent per annum. Given this, India was set to be the engine for the retail bandwagon."